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/raid1/www/Hosts/bankrupt/TCRLA_Public/170928.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Thursday, September 28, 2017, Vol. 18, No. 193 Headlines B R A Z I L ABENGOA BIOENERGIA: Files for Bankruptcy Protection C O L O M B I A CREDIVALORES - CREDISERVICIOS: S&P Affirms 'B+/B' Credit Ratings D O M I N I C A N R E P U B L I C DOMINICAN REP: Official Vows Clear Rules to Develop Oil Industry H A I T I HAITI: Truckers Block Border Crossing, Demand Ban Lifted J A M A I C A JAMAICA: S&P Affirms 'B' Sovereign Credit Ratings M E X I C O PETROLEOS MEXICANOS: Bomb Threat Forces Evacuation of HQ VOLKSWAGEN BANK: Moody's Affirms Ba2 Long-Term Deposit Rating P U E R T O R I C O PILGRIM'S PRIDE: Moody's Rates $700MM Senior Unsecured Notes B1 PUERTO RICO: Debt Casts Shadow Over Storm Recovery Efforts S T. K I T T S & N E V I S ST. KITTS & NEVIS: Draws Criticism for Cutting CBI Investment T R I N I D A D & T O B A G O TRINDAD & TOBAGO: Hoteliers Fighting for Survival V E N E Z U E L A VENEZUELA: S&P Suspends CCC- Ratings on Four LC-Denom. Debt Issues X X X X X X X X X * Eastern Caribbean to Get US$6.3MM Grant From World Bank - - - - - =========== B R A Z I L =========== ABENGOA BIOENERGIA: Files for Bankruptcy Protection --------------------------------------------------- Marcelo Teixeira at Reuters reports that Abengoa Bioenergia Brasil, the Brazilian sugar and ethanol arm of struggling Spanish conglomerate Abengoa SA, said it had filed for bankruptcy protection. The company, which operates two mills, said in an emailed statement that it had tried unsuccessfully for the last 19 months to find investors with fresh capital to keep its operations running, according to Reuters. "Brazil's current economic and political crisis, along with the 40 percent drop in sugar prices, led investors showing initial interest in the company to flee," the company said in the statement obtained by the news agency. More than 50 sugar mills are currently under bankruptcy protection in Brazil, a result of low sugar and ethanol prices in the first half of the decade, the report notes. Prices improved during a global sugar deficit in 2015 and 2016, but have fallen again this year, the report relays. =============== C O L O M B I A =============== CREDIVALORES - CREDISERVICIOS: S&P Affirms 'B+/B' Credit Ratings ---------------------------------------------------------------- S&P Global Ratings affirmed its 'B+' long-term and 'B' short-term counterparty credit ratings on Credivalores - Crediservicios SAS (Credivalores). At the same time, S&P affirmed the 'B+' issue- level rating on the firm's senior unsecured notes. The outlook remains stable. S&P said, "The issuer credit ratings on Credivalores reflect our business position assessment, supported by a diversified business mix and good market position in the Colombian financial system; its capital and earnings, underpinned by our forecasted RAC ratio of 8.5%, on average for the next 12 to 18 months; and its risk position, mainly driven by its lending and underwriting standards that are stronger than those of other NBFIs we rate in the region. The ratings also reflect our view that the firm's funding structure is primarily concentrated in one global issuance, and that its liquidity levels are in line to support our expected growth. The stand-alone credit profile (SACP) remains 'b+'. "The ratings also incorporate our positive view of Credivalores' credit profile compared with other NBFIs we rate in the region. We believe Credivalores has fundamentals that will allow the company to navigate through the challenging Colombian economic conditions. In our view, for the next 12-18 months, the company's credit losses will be manageable, because payroll discount loans account for 53% of its total credit loans and we don't expect the unemployment rate to affect this portfolio, since 87% of its payroll clients are public employees or retirees." =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REP: Official Vows Clear Rules to Develop Oil Industry ---------------------------------------------------------------- Dominican Today reports that Energy and Mines Minister Antonio Isa Conde disclosed the fiscal policy and contractual proposals to develop Dominican Republic's oil and gas industry, with options based on tax and production sharing, and balanced profit for the State and investors. The tax formula is available on the agency's website for study and comments from interested parties and concludes the first stage of the oil and gas exploration and production project to pave the way for tender offers for the blocs of greater interest, according to Dominican Today. Minister Isa calls it a fundamental step after collecting and publishing the seismic information in the National Hydrocarbons Database, whose interpretation allowed to define the six basins with the greatest potential, the report notes. Likewise, in 2016 the decree was issued that regulates the exploration and exploitation of hydrocarbons, the report relays. "The model presented will clearly define the type of business that the state will want to do in terms of hydrocarbons and under what economic conditions the contracts will be awarded, dropping the model of direct allocation," Mr. Isa told local and international guests, notes the report. "I take this opportunity to emphasize once again that in this process there will be no direct allocation and that everything will be carried out under a strict international tender procedure." Mr. Isa added that the bases of an international public tender are being prepared that in the first stage will tender the blocs of Azua and Enriquillo. "Our purpose is that in the first quarter next year we're calling for tenders with all of the game's rules clear, transparent, and, in a word, by the booklet," the report quoted Mr. Isa as saying. As reported in Troubled Company Reporter-Latin America on July 24, 2017, Moody's Investors Service has upgraded the Dominican Republic's long term issuer and debt ratings to Ba3 from B1 and changed the outlook to stable from positive, based on the following key drivers: (1) The Dominican Republic's continued robust growth outlook compared to rating peers, coupled with a reduction in external risks as current account deficits have declined and international reserves have increased. (2) The reduction in fiscal deficits over the last four years and Moody's expectation that fiscal deficits will remain shy of 3% of GDP, supported by fiscal restraint and reduced transfers to the electricity sector. ========= H A I T I ========= HAITI: Truckers Block Border Crossing, Demand Ban Lifted -------------------------------------------------------- Dominican Today reports that Haitian truckers parked their rigs to block the border crossing at Malpasse, cutting off traffic to Haiti, from Independencia province (west). The Haitian truckers and merchants staged the protest against their country's authorities, demanding the end of the blockade on 22 staple products of Dominican origin, according to Dominican Today. Private truckers who crossed the border were stripped of their keys and their vehicles turned off on the Haitian side of the gate, the report notes. The stoppage hobbled the binational market held Mondays and Thursdays in the area of Malpasse, but Haitian buyers who had already bought some products managed to take them to their country by alternate routes, the report relays. The report says that the incident quickly caused a 300-meter-long line of vehicles to form on both sides of the border. Fond Parissien truckers union leader Jerald Desi said the stoppage aims to get the government to lift the ban on Dominican products, calling it a farce, the report notes. "The ban most harms the poorest Haitians who live in utter misery, since the rich seven who import goods from the Dominican Republic do so without inconvenience," Mr. Desi said by phone, quoted by listin.com.do, the report adds. As reported in Troubled Company Reporter-Latin America on July 24, 2017, Moody's Investors Service has upgraded the Dominican Republic's long term issuer and debt ratings to Ba3 from B1 and changed the outlook to stable from positive, based on the following key drivers: (1) The Dominican Republic's continued robust growth outlook compared to rating peers, coupled with a reduction in external risks as current account deficits have declined and international reserves have increased. (2) The reduction in fiscal deficits over the last four years and Moody's expectation that fiscal deficits will remain shy of 3% of GDP, supported by fiscal restraint and reduced transfers to the electricity sector. ============= J A M A I C A ============= JAMAICA: S&P Affirms 'B' Sovereign Credit Ratings ------------------------------------------------- On Sept. 25, 2017, S&P Global Ratings affirmed its 'B' long- and short-term foreign and local currency sovereign credit ratings on Jamaica. The outlook on the long-term rating remains stable. At the same time, S&P Global Ratings affirmed its 'B+' transfer and convertibility assessment on the country. OUTLOOK S&P said, "The stable outlook on Jamaica reflects our expectation that the government will continue to meet strict fiscal targets, including a high primary surplus, over the next several years. This strong commitment will support the gradual reduction in the country's debt and interest burdens, although both will continue to constrain Jamaica's creditworthiness, given the debt's size. At the same time, we believe that public-sector reform will continue to be a challenge, particularly if growth remains subdued. We expect that high crime, perceived corruption, low productivity, and a lack of business competitiveness will weigh on economic growth, despite the strong performance of some sectors. Nevertheless, we expect that inflation will remain within the central bank's target, although full-fledged inflation targeting will take several years to fully implement. "We could raise the ratings in the next year if Jamaica improves its external liquidity and indebtedness such that the economy becomes more resilient to potential external shocks, including higher oil prices. This, combined with sustained higher economic growth that facilitates the remaining public-sector reforms and lowering the debt burden, could lead us to raise the ratings. We could lower the ratings during the same period if, contrary to our expectations, the government misses fiscal targets, which could increase the government's debt burden and put pressure on interest rates. Failure to respond in a timely and forceful manner to these adverse developments could erode the country's financial profile, leading to a downgrade." RATIONALE S&P's ratings on Jamaica continue to be limited by the country's high debt and interest burden, which restrict its fiscal flexibility. While economic growth is slowly picking up, structural impediments, including external vulnerability, continue to hamper growth in Jamaica's low income levels. Nevertheless, the government's tight fiscal stance fosters macroeconomic stability-- including low inflation--and supports the country's creditworthiness. Institutional and economic profile: Further institutional reform will depend on the pace of economic growth, which we expect to only slowly accelerate over the next year. The government's commitment to sustainable fiscal policy will underpin macroeconomic stability in the medium term. Economic growth will facilitate public-sector reform as a growing private sector can absorb displaced public-sector workers. S&P said, "Nevertheless, we anticipate that bottlenecks will continue limiting the speed at which growth accelerates, despite the strong performance of some sectors. "We believe that the government's commitment to fiscal consolidation will continue to foster macroeconomic stability in Jamaica. This commitment has spanned changes in government and we believe is representative of bipartisan consensus on the general direction of policymaking. Despite previous strong divisions, Jamaica's two main political parties--the ruling Jamaica Labor Party (JLP) and the opposition People's National Party (PNP)-- currently share a similar outlook on macroeconomic policy, in our opinion. Since taking office in 2016, the JLP has largely continued the economic policies of the former PNP administration, including achieving strict fiscal targets set under the previous IMF Extended Fund Facility (EFF) program. "While we expect general policy continuity over the next several years, we believe that the remaining public-sector reforms on the government's agenda will take time to achieve, particularly as economic growth only gradually accelerates. Before the EFF program expired in early 2017, Jamaican authorities engaged with the IMF regarding a successor program. They agreed on a three-year stand- by arrangement, which serves primarily as a precautionary liquidity backstop but also as an anchor for policy continuity. Under the program, the government is seeking to shift the allocation of its resources toward growth-inducing expenditure. To do so, local authorities are identifying redundancies and services that public-sector entities can share; and establishing clear controls on public-sector wages, among other measures. The government has also facilitated the creation of a new civil- society monitoring group--the Public Sector Transformation Oversight Committee--to strengthen government accountability during this process. While the government has made progress toward these ends, we believe it will take time to fundamentally shift the structure of spending. The government is starting a new round of public-sector wage negotiations for 2017-2019 and working toward its goal of bringing down the wage bill to 9% of GDP from just over 10% in 2016-2017--a goal the government pushed back to 2018-2019 from 2016-2017. While we believe that the government will more easily meet this goal with higher economic growth as the private sector absorbs more workers, we also think that structural growth limitations will be hard to overcome in the near term. "In our opinion, structural barriers will continue to impede stronger economic growth in Jamaica. We expect annual real GDP growth to average 1.9% over the next three years, despite stronger performance in certain sectors of the economy. We also expect that the country's per capita GDP will be close to US$5,000 in 2017. The structural barriers include high security costs, perceived corruption, low productivity, a lack of business competitiveness, and vulnerability to external shocks. Nevertheless, some sectors, such as tourism, which directly represents about 8% of Jamaica's GDP, have grown quickly over the past couple of years. We expect this growth to benefit employment levels, which as of April 2017 grew by about 3% relative to April 2016, while unemployment fell to 12.2% from 13.7%. However, links between tourism and the rest of the economy are limited, in our opinion, muting the growth's impact on the overall economy. The government established the Ministry of Economic Growth and Job Creation in early 2016, headed by the prime minister, and an Economic Growth Council under the ministry in part to address these issues. However, we expect that the dividends of these efforts will take time to translate into higher GDP growth." Flexibility and performance profile: Strict fiscal policy will continue to ease the still-high debt burden, although vulnerability to external shocks remains. S&P expects the government to meet its 7% of GDP primary surplus target through the medium term. While this tight fiscal policy will reduce Jamaica's debt burden, fiscal flexibility will be limited. Still-high external liquidity needs and indebtedness make the country vulnerable to external shocks and potential loss in investor confidence. S&P said, "Following the implementation of a two-stage tax reform to shift the tax system toward indirect taxation, we expect the government will continue to overperform on its primary surplus target, which we expect to average 7.4% of GDP over the next four years. Continued compliance with ambitious fiscal targets will contribute to a gradual decline in net general government debt in our forecasts to below 100% of GDP by 2019, while the change in general government debt will average 2.5% over the same period. Nevertheless, we expect that interest payments will continue to represent a significant portion of Jamaica's budget, averaging about 26% of government revenue over the next four years, which will continue to limit fiscal flexibility, in our opinion. "Given the most recent tax reform's success, we expect the Jamaican government to continue to shift the tax system toward indirect taxation from direct, strengthening formality and broadening the tax base. Over the past year, the government has raised the minimum income level required to pay personal income tax, offsetting this through increases in excise and consumption taxes on items such as cigarettes, fuel, and alcohol. The government believes it can continue to work toward these goals and plans to strengthen tax compliance and expand the tax base over the next several years. "Strong fiscal performance will serve as a solid anchor for external stability. Jamaica's external profile has benefited from favorable conditions over the past couple of years. Low oil prices have contributed to a decline in current account payments, given that fuel imports represent around 12% of current account receipts (CAR), although they have represented as much as 26% when oil prices were higher. Growth in the tourism industry has also benefited Jamaica's external profile, given that tourism receipts represent about 34% of the country's CAR. We expect slightly higher oil prices starting in 2019 to contribute to a slight uptick in Jamaica's external financing needs and, subsequently, its external indebtedness. However, we believe that strong growth in tourism, solid growth in the U.S. economy, and growth in export sectors such as mining will stabilize Jamaica's external financing needs to average 102% of CAR and foreign exchange reserves over the next four years. The country's external accounts are linked to the U.S. primarily through tourism and personal remittances, which account for about 28% of CAR. At the same time, we expect external debt net of international reserves and financial sector assets to average 102% of CAR during the same period. While we expect these levels to be relatively stable, they are still significant and reflect the Jamaican economy's external vulnerability. "We believe that favorable external conditions, combined with fiscal tightening, will support historically low inflation levels over the next several years. We expect inflation to fall within the central bank's target of 4%-6% through 2020. We also expect the central bank to facilitate orderly movements in the local currency, in line with the country's managed floating exchange rate. The bank is introducing measures to support inflation targeting, such as revising its mandate, strengthening operational independence, and improving market transparency. Still, it will take time before these measures lead to fully operational inflation targeting. We believe that monetary policy tools still have a limited impact on the economy given low--albeit rising-- levels of private-sector lending and limited secondary bond market trading." RATINGS LIST Ratings Affirmed Jamaica Sovereign credit rating B/Stable/B Senior unsecured B Air Jamaica Ltd. Senior unsecured B National Road Operating and Constructing Company Ltd Senior unsecured B =========== M E X I C O =========== PETROLEOS MEXICANOS: Bomb Threat Forces Evacuation of HQ -------------------------------------------------------- EFE News reports that state-owned oil giant Petroleos Mexicanos (Pemex) said its Mexico City headquarters was evacuated after a bomb threat was received, but no explosives were found. "A bomb threat was received at Pemex Tower, under the security protocol an evacuation was carried out so the corresponding inspection" could be conducted, Pemex said in a Twitter post, according to EFE News. After the building was searched, officials determined it was "a false alarm" and "we are getting back to work," the report quoted Pemex Chief Executive Officer Jose Antonio Gonzalez as saying. About 6,000 people work at the Pemex office complex in the Veronica Anzures district, a Pemex representative told EFE. On Jan. 31, 2013, an explosion caused by a gas leak killed 37 people and injured more than 100 others at Pemex headquarters, the report recalls. The explosion was caused by an accumulation of methane gas ignited by a spark, officials said. Workers were doing maintenance on the structure's support columns when the blast happened. The main tower of the office complex, a 56-story structure, was not damaged in the explosion, the report adds. VOLKSWAGEN BANK: Moody's Affirms Ba2 Long-Term Deposit Rating ------------------------------------------------------------- Moody's de Mexico affirmed Volkswagen Bank, S.A. (VW Bank Mexico)'s Ba2 and A2.mx long-term global and Mexican National Scale bank deposit ratings and their corresponding NP and MX-1 short term global and Mexican National Scale bank deposit ratings. The outlook on the global long-term deposit ratings remains stable. Moody's also affirmed the bank's b2 Baseline Credit Assessment (BCA), ba2 Adjusted BCA and Ba1(cr)/NP(cr) Counterparty Risk (CR) Assessments. The bank's debt ratings are unaffected by action. RATINGS RATIONALE VW Bank Mexico's ratings incorporate Moody's assessment of a very high likelihood of extraordinary support from the bank's German parent Volkswagen Financial Services AG (VW FS AG, A3 negative) as well as a robust level of capital, relatively strong asset quality, and profitability that also remains relatively strong, notwithstanding a sharp deterioration in recent years in part given an increase funding costs, while lending rates remained relatively stable due to tight competition. Stiff competition also explains the contraction in the loan book this year, which put further pressure on profitability. These credit strengths offset challenges including the bank's heavy reliance on short-term wholesale market funding and narrow liquidity, as well as its narrow focus on car financing to individuals, which makes it vulnerable to downturns in domestic car sales and consumer purchasing power. The bank's tangible common equity has been supported by a full earnings retention. At the same time, nonperforming loans have remained relatively stable averaging around 3% of gross loans since year-end 2015, slightly above Mexico's banking system average of 2.4%, but still moderate by global standards. Further, net income stood at a still robust 1.4% of assets during the first six months of 2017 despite having declined significantly from as high as 4% by year-end 2013. While VW Bank Mexico has always had a limited and concentrated deposit base, it historically supplemented this with local bond issuances, which have been backed by its German parent. However, market rates for these borrowings have increased sharply following a corresponding increase in Mexico's policy rate since December 2015. In order not to lock in higher interest rates for a longer term, the bank turned to short-term wholesale funding instead. These short-term funds equaled 18% of the bank's total assets as of June 2017. Moreover, these funds are currently provided by a single bank and come due on the same day, while just 10% of assets are liquid, exposing the bank to substantial refinancing and repricing risks. Should the bank be unable to refinance this debt in a timely manner, however, Moody's believes there is a very highly likelihood that VW FS AG will provide financial support in order to avoid a failure of its subsidiary, given (i) the strategic fit and importance of VW Bank Mexico operations for VW FS AG, (ii) the fact that both companies share the name, and (iii) the reputational risk that a default by VW Bank Mexico would represent for VW FS AG and its ultimate parent, car manufacturer Volkswagen Aktiengesellschaft (A3 negative). VW Bank Mexico's A2.mx deposit rating is the sole Mexican National Scale rating corresponding to its Ba2 global scale rating. Similarly, the bank's NP and MX-1 global and national scale short term ratings are the sole short term ratings corresponding to its Ba2 and A2.mx long term ratings. The stable outlook considers the resilient economic growth anticipated for Mexico, despite the uncertainties generated since the US presidential elections. The more benign operating environment will help support VW Bank Mexico's asset quality as well as steady demand for car loans, which together with a stabilization of funding costs should allow it to avoid further deterioration of profitability. WHAT COULD MOVE THE RATINGS UP OR DOWN Upward rating pressure would be triggered by an extension in the bank's liability tenors and a greater diversification of its short-term funding sources, coupled with a more stable profitability as well as maintenance of strong capitalization. On the other hand, VW Bank Mexico's ratings would face downward pressure if its reliance on short-term funding continues to increase, if profitability continues to decline, or if capital levels or asset quality deteriorate substantially. Downward pressure would also build if the bank is unable to refinance its short-term debt in a timely manner. LIST OF RATINGS AFFECTED The following ratings of Volkswagen Bank, S.A. (821153838) were affirmed: - Long term global local currency deposit rating of Ba2, stable outlook - Long term global foreign currency deposit rating of Ba2, stable outlook - Short term global local currency deposit rating of NP - Short term global foreign currency deposit rating of NP - Long term Mexican National Scale local currency deposit rating of A2.mx - Short term Mexican National Scale local currency deposit rating of MX-1 The following assessments of Volkswagen Bank, S.A. (821153838) were affirmed: Baseline credit assessment of b2 Adjusted baseline credit assessment of ba2 Long and short term counterparty risk assessments of Ba1(cr)/NP(cr) The long- and short-term Mexican National Scale ratings of A2.mx /MX-1 indicate above-average creditworthiness relative to other domestic issuers. The principal methodology used in these ratings was Banks published in January 2016. The period of time covered in the financial information used to determine Volkswagen Bank, S.A.'s rating is between January 1, 2012 and June 30, 2017 (source: Moody's, as well as issuer's annual audited and quarterly unaudited financial statements). ====================== P U E R T O R I C O ====================== PILGRIM'S PRIDE: Moody's Rates $700MM Senior Unsecured Notes B1 --------------------------------------------------------------- Moody's Investors Service has assigned B1 ratings to Pilgrim's Pride Corporation's (Ba3 CFR stable) $700 million of senior unsecured notes being offered in eight-year and ten-year tranches. Net proceeds from the proposed offerings will be used to repay most of the $737 million equivalent subordinated unsecured seller note due to JBS S.A., and for general corporate purposes. The ratings outlook is stable. On September 8, 2017 Pilgrim's acquired UK-based poultry company Moy Park Holdings Europe) Limited (B1 stable) for approximately GBP1.0 billion ($1.3 billion, based on a 1.31 USD/GBP exchange rate at the time). Moy Park is a wholly owned subsidiary of Brazil's JBS S.A. (B2 review for downgrade), which also controls Pilgrim's through a 78.5% equity stake. Moody's previously has said that the transaction is credit positive because it diversifies Pilgrim's sales, supply chain, poultry products. In addition, financial leverage will remain modest. Pro forma debt/EBITDA is approximately 2.1x, excluding approximately $50 million of planned cost synergies. The Moy Park transaction was funded with a one-year GBP562.5 million ($736.9 million) subordinated unsecured seller note issued to JBS S.A., assumed GBP300.0 ($393 million) 6.25% senior unsecured notes due 2021 at Moy Park, and GBP230.0 million ($301.3 million) in cash. The Moy Park noteholders are protected by a 101% change-of-control put option; however, based on recent market prices, the options are not likely to be exercised. RATINGS RATIONALE Pilgrim's Ba3 Corporate Family Rating is supported by its leading position as one of the world's largest chicken processors, low financial leverage, and solid operating performance driven by a disciplined operating strategy focused on maximizing profit margin and earnings stability. These strengths are balanced against the company's narrow focus in the cyclical chicken processing industry, which is characterized by volatile earnings and narrow profit margins. The rating also reflects the company's appetite for potentially large leveraged acquisitions; although overall, the company has demonstrated notable discipline with respect to acquisition price and value. Moody's evaluates Pilgrim's credit profile on a standalone basis. Thus, the ratings are not directly affected by ongoing legal and governance challenges currently facing owners of its indirectly controlling parent JBS S.A. (B2, review for downgrade). However, if developments at JBS related entities begin to negatively affect Pilgrims, a downgrade could occur. Pilgrim's Pride Corporation: Moody's has assigned the following ratings: Proposed senior unsecured notes due 2025 at B1 (LGD5); Proposed senior unsecured notes due 2027 at B1 (LGD5). The ratings outlook is stable. The proposed 2025 notes will be an add-on under the indenture governing existing $500 million 5.75% senior unsecured notes. The senior unsecured debt instruments are rated one notch lower than Pilgrim's Ba3 Corporate Family Rating, reflecting their junior position relative to $1.55 billion of senior secured debt instruments, including a $750 million asset-based revolving credit facility and an $800 million Term Loan A, both maturing on May 6, 2022. Pilgrim's ratings are constrained by the company's single-protein concentration. However, the company's ratings could be upgraded if the company continues to enhance earnings stability through improvements to business and product mix. Quantitatively, Pilgrim's ratings could be upgraded if the company maintains at least 6% operating profit margin, positive free cash flow, sustains debt to EBITDA below 2.0x, and liquidity (cash and backup availability) of at least $1 billion. Conversely, Pilgrim's ratings could be downgraded in the event of a major leveraged acquisition or share buyback, deteriorating industry fundamentals that lead to prolonged negative free cash flow, or deteriorating liquidity. The ratings could also be downgraded if legal, governance or other challenges at related entities, including JBS S.A. negatively affect the risk profile of Pilgrim's. The principal methodology used in these ratings was Global Protein and Agriculture Industry published in June 2017. Corporate Profile Headquartered in Greeley, Colorado, Pilgrim's Pride Corporation (NASDAQ: PPC) is the second largest chicken producer in the world, with operations in the United States, Mexico and Puerto Rico. The company produces, processes, markets and distributes fresh, frozen and value-added chicken products to foodservice customers, distributors and retail operators worldwide. For the twelve months ended June 25, 2017, Pilgrim's revenues approximated $8.2 billion. Pilgrim's Pride is controlled by Sao Paulo, Brazil based JBS, S.A. (B2, ratings under review for downgrade), and the largest processor of protein in the world, through an indirect 78.5% equity ownership stake. Headquartered in Craigavon, Northern Ireland, Moy Park is a leading player in the UK poultry processing market, with a significant degree of vertical integration in the breeding and rearing chain. Its activities also include processing of other meat and food products, and its operations extend beyond the UK to continental Europe. It operates thirteen production facilities with a capacity of 280 million birds annually with a workforce in excess of 12,000 full-time equivalent employees. Customers include large supermarket chains as well as fast food retailers. For the last twelve months ended June 2017, the company reported revenue and EBITDA of $2 billion and $135 million, respectively. PUERTO RICO: Debt Casts Shadow Over Storm Recovery Efforts ---------------------------------------------------------- RJR News reports that Puerto Rico's more than $70 billion in debt is casting a shadow over recovery efforts on the Caribbean island, which was destroyed by Hurricane Maria. Puerto Rican Governor Ricardo Rosello, who is seeking federal funds, warned of a "massive exodus" without aid, according to RJR News. US President Donald Trump wrote on Twitter that the island was in "deep trouble," notes the report. He added that its debts, "sadly, must be dealt with." In May, Puerto Rico declared a form of bankruptcy, seeking to restructure more than $70 billion in debt, the report relays. About Puerto Rico Puerto Rico is a self-governing commonwealth in association with the United States that's facing a massive bond debt of $70 billion, a 68% debt-to-GDP ratio and negative economic growth in nine of the last 10 years. The Commonwealth of Puerto Rico has sought bankruptcy protection, aiming to restructure its massive $74 billion debt-load and $49 billion in pension obligations. The debt restructuring petition was filed by Puerto Rico's financial oversight board in U.S. District Court in Puerto Rico (Case No. 17-01578) on May 3, 2017, and was made under Title III of 2016's U.S. Congressional rescue law known as the Puerto Rico Oversight, Management, and Economic Stability Act ("PROMESA"). The Financial Oversight and Management Board later commenced Title III cases for the Puerto Rico Sales Tax Financing Corporation (COFINA) on May 5, 2017, and the Employees Retirement System (ERS) and the Puerto Rico Highways and Transportation Authority (HTA) on May 21, 2017. On July 2, 2017, a Title III case was commenced for the Puerto Rico Electric Power Authority ("PREPA"). U.S. Chief Justice John Roberts has appointed U.S. District Judge Laura Taylor Swain to oversee the Title III cases. The Honorable Judith Dein, a United States Magistrate Judge for the District of Massachusetts, has been designated to preside over matters that may be referred to her by Judge Swain, including discovery disputes, and management of other pretrial proceedings. Joint administration of the Title III cases, under Lead Case No. 17-3283, was granted on June 29, 2017. The Oversight Board has hired as advisors, Proskauer Rose LLP and O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic consultant, Citigroup Global Markets, as municipal investment banker, and Ernst & Young, as financial advisor. Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M. Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at O'Neill & Borges are onboard as attorneys. McKinsey & Co. is the Board's strategic consultant, Ernst & Young is the Board's financial advisor, and Citigroup Global Markets Inc. is the Board's municipal investment banker. Prime Clerk LLC is the claims and noticing agent. Prime Clerk maintains a case web site at: https://cases.primeclerk.com/puertorico Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA, and PREPA. O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF), the agency responsible for negotiations with bondholders. The Oversight Board named Professor Nancy B. Rapoport as fee examiner and to chair a committee to review professionals' fees. Bondholders' Attorneys Toro, Colon, Mullet, Rivera & Sifre, P.S.C. and Kramer Levin Naftalis & Frankel LLP serve as counsel to the Mutual Fund Group, comprised of mutual funds managed by Oppenheimer Funds, Inc., Franklin Advisers, Inc., and the First Puerto Rico Family of Funds, which collectively hold over $3.5 billion in COFINA Bonds and over $2.9 billion in other bonds issued by Puerto Rico and other instrumentalities, including over $1.8 billion of Puerto Rico general obligation bonds ("GO Bonds"). White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS Family of Funds and the Puerto Rico Family of Funds, which hold $613.3 million in COFINA bonds. Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam & Lausell are co-counsel to the ad hoc group of General Obligation Bondholders, comprised of Aurelius Capital Management, LP, Autonomy Capital (Jersey) LP, FCO Advisors LP, Franklin Mutual Advisers LLC, Monarch Alternative Capital LP, Senator Investment Group LP, and Stone Lion Capital Partners L.P. Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are co-counsel to the ad hoc coalition of holders of senior bonds issued by COFINA, comprised of at least 30 institutional holders, including Canyon Capital Advisors LLC and Varde Investment Partners, L.P. Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson Kempner Capital Management LP, OZ Management, LP, and OZ Management II LP (the QTCB Noteholder Group). Committees The U.S. Trustee formed a nine-member Official Committee of Retirees and a seven-member Official Committee of Unsecured Creditors of the Commonwealth. The Retiree Committee tapped Jenner & Block LLP and Bennazar, Garcia & Milian, C.S.P., as its attorneys. The Creditors Committee tapped Paul Hastings LLP and O'Neill & Gilmore LLC as counsel. ============================ S T. K I T T S & N E V I S ============================ ST. KITTS & NEVIS: Draws Criticism for Cutting CBI Investment ------------------------------------------------------------- RJR News reports that a statement issued by St. Kitts and Nevis announcing a drastic 50 per cent cut in the investment requirement for its citizenship by investment (CBI) program to create a "hurricane relief fund", has drawn widespread condemnation. Mahdi Mohammed, CEO of Guide Consultants, said this is a truly shameful move by St. Kitts, according to RJR News. Mr. Mohammed added that this is simply a ploy, a blatantly opportunistic move to improve the competitiveness of the St. Kitts and Nevis CBI program at the expense of their Caribbean neighbors, the report notes. The report relays that Dominica is not a wealthy country but following Hurricane Irma it was willing to share what it had with other Caribbean islands, for example by sending water and telegraph poles, two commodities that it is now in desperate need of itself. It even pledged EC$500,000 to St. Kitts and Nevis after Irma, the report notes. Mr. Mohammed argued that Dominica has now lost every source of government revenue except its CBI program and St. Kitts and Nevis is attempting to undermine even that, the report adds. ================================ T R I N I D A D & T O B A G O ================================ TRINDAD & TOBAGO: Hoteliers Fighting for Survival ------------------------------------------------- Leah Sorias at Trinidad Express reports that hotel occupancy rates in Tobago have dwindled to as low as 20 per cent. And with no silver lining in sight for the transportation woes between Trinidad and Tobago, hoteliers are fearing the worst for the upcoming slow October to November period, according to Trinidad Express. Despite their present predicament, they contend that cutting jobs is not an option for them, notes the report. "Management has taken a concerted effort not to lay anyone off. We understand the situation and because of this we have been able to ride the storm," said Sherwin Boyce, Assistant Operations Manager of Kariwak Village Holistic Haven and Hotel, in Crown Point, the report relays. Mr. Boyce said usually during the July/August peak season the hotel's occupancy rate is around 65 per cent to 70 per cent, says the report. "We've been hovering just over 25 per cent," he told Express Business. "On few days we would get over 50 per cent occupancy, and that's only because people's flights have been cancelled, they are at the airport and they have to look for accommodation. We are located very close to the airport," Mr. Boyce stated, the report discloses. Mr. Boyce said because of the uncertainty of the ferry and airline service to Tobago, some customers have cancelled future bookings, the report adds. ================= V E N E Z U E L A ================= VENEZUELA: S&P Suspends CCC- Ratings on Four LC-Denom. Debt Issues ------------------------------------------------------------------ S&P Global Ratings suspended its 'CCC-' local currency issue ratings on four of the Bolivarian Republic of Venezuela's local currency-denominated debt issues. S&P said, "At the same time, we affirmed our 'CCC-' long-term foreign and local currency sovereign issuer credit ratings. The outlook on the long-term ratings is negative. In addition, we affirmed our 'C' short-term foreign and local currency sovereign issuer credit ratings. The transfer and convertibility assessment remains 'CCC-'." S&P suspended the 'CCC-' issue ratings on the following local currency bonds: -- Venezuelan bolivar (VEF) 1.338 trillion due October 2017 -- VEF0.645 trillion due November 2018 -- VEF0.802 trillion due August 2019 -- VEF0.715 trillion due October 2020 RATIONALE S&P said, "The rating action follows U.S. Executive Order 13808, dated Aug. 24, 2017, which introduced additional sanctions with respect to the political situation in Venezuela. We suspended our ratings on these particular bonds because maintenance of the ratings would constitute a prohibited transaction under the Sanctions Order. The related bonds have not been authorized as permitted transactions under any of the general licenses issued by the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) on Aug. 25, 2017, in connection with the Sanctions Order. "We will consider reinstating the issue ratings on these bonds if the U.S. sanctions are lifted with respect to these bonds, all else being equal." OUTLOOK S&P said, "The negative outlook on our long-term sovereign issuer credit ratings reflects the heightened risk of the Venezuelan government defaulting, including through undertaking a distressed debt exchange, in the next six months. Failure to introduce substantial corrective measures to stabilize the economy, alleviate shortages of basic goods, and reverse the recent increase in political polarization could lead to worsening external liquidity and debt default." Steps to defuse the heightened political tensions in Venezuela would reduce the risks of eroding governability and high volatility in economic policies. That, along with prompt, corrective reforms that begin to address the country's economic imbalances and to strengthen its external liquidity, could lead us to affirm the ratings at their current level. In accordance with S&P's relevant policies and procedures, the Rating Committee was composed of analysts that are qualified to vote in the committee, with sufficient experience to convey the appropriate level of knowledge and understanding of the methodology applicable (see 'Related Criteria And Research'). At the onset of the committee, the chair confirmed that the information provided to the Rating Committee by the primary analyst had been distributed in a timely manner and was sufficient for Committee members to make an informed decision. After the primary analyst gave opening remarks and explained the recommendation, the Committee discussed key rating factors and critical issues in accordance with the relevant criteria. Qualitative and quantitative risk factors were considered and discussed, looking at track-record and forecasts. The committee agreed that all key rating factors were unchanged. The chair ensured every voting member was given the opportunity to articulate his/her opinion. The chair or designee reviewed the draft report to ensure consistency with the Committee decision. The views and the decision of the rating committee are summarized in the above rationale and outlook. The weighting of all rating factors is described in the methodology used in this rating action (see 'Related Criteria And Research'). RATINGS LIST Ratings Affirmed Venezuela (Bolivarian Republic of) Sovereign Credit Rating CCC-/Negative/C Transfer & Convertibility Assessment CCC- Venezuela (Bolivarian Republic of) Senior Unsecured CCC- Ratings Suspended To From Venezuela (Bolivarian Republic of) Senior Unsecured Local Currency NR CCC- ================= X X X X X X X X X ================= * Eastern Caribbean to Get US$6.3MM Grant From World Bank --------------------------------------------------------- RJR News reports that the World Bank approved a US$6.3 million grant to support Eastern Caribbean countries to preserve and strengthen resilience of coastal and marine resources, and implement regional policies to stimulate blue growth. This will allow countries to better manage natural infrastructure which is the first line of defense against storm surges and damage from rising frequency of extreme weather events, such as the recent hurricanes, according to RJR News. The Caribbean Regional Oceanscape project will be implemented through the Organization of Eastern Caribbean States (OECS) Commission in close collaboration with member-states, the report relays. The Caribbean Regional Oceanscape project supports Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines to transition towards a 'blue economy' model, where sustainable ocean-based industries help deliver jobs, reduce poverty and promote shared prosperity across the region, the report says. *********** Monday's edition of the TCR-LA delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-LA editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-LA constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-LA editor holds some position in the issuers' public debt and equity securities about which we report. Tuesday's edition of the TCR-LA features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. Submissions about insolvency-related conferences are encouraged. Send announcements to conferences@bankrupt.com *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2017. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Joseph Cardillo at 856-381-8268. * * * End of Transmission * * *